Proposed amendments would allow email summons from the Ontario Securities Commission

Following a recommendation from the province’s Capital Markets Modernization Taskforce (the Taskforce), Ontario’s Minister of Finance is proposing to ease the requirements for the Ontario Securities Commission (OSC) when delivering summonses in the course of enforcement investigations.

Delivery methods for summons in Ontario

Typically, the OSC is subject to stricter delivery requirements. Under section 163 of the regulations to the Securities Act, summonses issued pursuant to the Securities Act are required to be personally served. However, on September 3, 2024, the Ontario government published its proposed amendments to section 163 of Ontario Regulation 1015 of the Securities Act. In them, Ontario is seeking to revoke section 163 and broaden the OSC’s methods for delivering summonses to individuals and companies, in addition to personal service.

The suggested legislative amendments revoke the personal service requirement and instead allow for summonses to be served by

• personal or electronic delivery (with a requirement that electronic delivery only constitutes legal service if it is confirmed by the recipient or other evidence of receipt can be shown)
• leaving the summons at a subject’s last or usual residence with an occupant who is at least 16 years old
• permitting the OSC to make a substituted service order if the subject is evading service or if the last or usual address of the subject cannot be found or is unoccupied
• delivering to places of businesses
• the use of courier or registered mail

Safeguards such as an affidavit of service and specific requirements for email transmission and acceptance would be considered as part of the legislative amendments. The Taskforce previously recommended the change in its final report in 2021, noting that “the personal service requirement was outdated considering acceptable alternatives are available in an increasingly digitized capital markets sector.”

The government stated that the amendments would also align with the service requirements in other sorts of  provincial legislation, such as section 26 of the Provincial Offences Act, and the methods used by other financial market regulators, such as the Financial Services Regulatory Authority of Ontario.

Ongoing initiatives and feedback

The proposal is one of a number of initiatives introduced by Canadian capital markets regulators to address the perceived need to make the enforcement process more streamlined and effective. Osler has previously written about these initiatives, including in last year’s Osler Legal Outlook, on the OSC’s proposal to distribute funds from disgorgement orders to harmed investors and on the British Columbia Securities Commission’s administrative penalties.

Comments on the proposed amendments are open until October 18, 2024, and can be submitted on the government’s website.